Consolidating through acquisition or partnership
One of those tactics is through acquiring other companies: “Obviously, acquisition speaks for itself,” Hanson said. “There are companies in this industry that are fairly thinly capitalized…that are going to see the future and thought rates were going to come down maybe at the end of the year and now maybe it’s not until the end of next year. A lot of them are saying ‘I’m going to have to shut the company down, or merge, or do something.’ “
That’s where Hanson would step in – not with a hard sell, he suggested, but more of a dialogue on how to salvage their companies. “We’re not here as a vulture fund,” he said. “I’ve been in the business for almost 40 years, and I know of lot of these owners who are fantastic people who’ve built companies over 20 years and now they’re in their 60s trying to figure out their exit strategy if they don’t know how to move the company forward. And now they’re saying, ‘all the equity I’ve built over these years is now draining out of the company coffers’.”
The virtues of a gentle approach
He explained his approach: “What I want to do, and what I’m really intent on doing, is being a resource for them to talk about what strategies they can have to keep their companies going into the future – with or without them. I’m not interested in circling companies like a buzzard and waiting for somebody to die because, generally by then, they’ve lost all their value, all their strength. I want to talk to people before that really happens and just look down the future six months from now – where do you see your company? Where do you want to be?”
Given his industry tenure – including working at companies being bought and sold motivated by market forces – Hanson suggested he has empathy in such scenarios: “Everybody’s terrified that a bigger company like loanDepot comes in and tears their culture apart. That’s not our way.”
There are a variety of permutations to salvaging a firm, he suggested: “Whether it’s a joint venture, whether it’s a strategic partnership together, maybe we service their loans for them. There are a lot of different ways we can help them to offset costs and still maintain their identity if they don’t want to become part of our company platform.”
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